UBS proposes acquisition of Credit Suisse for up to $1 billion

UBS has made an offer to acquire Credit Suisse for up to $1 billion, a move that would combine Switzerland’s two largest banks. However, the all-share deal is expected to be priced significantly lower than Credit Suisse’s Friday closing price, which could potentially wipe out its shareholders.

The offer was communicated with a price of SFr0.25 a share to be paid in UBS stock, and UBS has insisted on a material adverse change clause that would void the deal if its credit default spreads increased by 100 basis points or more. The proposal comes amid ongoing concerns about Credit Suisse’s financial health, following a series of setbacks and losses.

The Swiss authorities are reportedly planning to bypass a shareholder vote on the transaction by changing the country’s laws in order to finalize the deal before Monday. This move has drawn criticism from some shareholders who believe that they should have a say in such a significant transaction.

It is important to note that the situation is rapidly evolving, and the terms of the deal may change or a deal may not be reached at all. The proposed acquisition has the potential to reshape the Swiss banking landscape and could have significant implications for the global financial industry.